Even if a foreclosure has started, it often takes several months before a Maryland home is foreclosed. You might still have time to get assistance from the state's Homeowner Assistance Fund program or work out a loss mitigation option with your loan servicer.
To help homeowners avoid foreclosure, the Maryland Commissioner of Financial Regulation set certain standards for mortgage servicers when borrowers apply for loss mitigation and to the state's Homeowner Assistance Fund program.
Under this guidance, applying to the Homeowner Assistance Fund counts as a loss mitigation application. So, once a servicer receives notice that a borrower has applied for the Homeowner Assistance Fund program, federal mortgage servicing laws, including the one against dual tracking, apply. (12 C.F.R. § 1024.41).
Also, under the Commissioner's guidelines, once a borrower gets a notification from the servicer about a loss mitigation denial or the availability of the Homeowner Assistance Fund program, whichever comes later, the servicer has to wait 14 days before proceeding with a foreclosure. If the servicer sends the notice electronically, the time begins on the date sent. If the servicer sends a notification by mail, the borrower is considered to have been notified three days after the mailing date.
The 14-day period should provide sufficient time for the borrower to get assistance from the Homeowner Assistance Fund program. The servicer may, depending upon actual application processing times, extend this period before proceeding with a foreclosure to ensure that the application is processed. Servicers must also allow an additional reasonable amount of time for a borrower to complete a loss mitigation application if Homeowner Assistance Fund help is approved contingent upon additional loss mitigation by the servicer.
In addition, the servicer can't file a notice of intent to foreclose or an order to docket, or proceed with a foreclosure sale if it gets notification more than 37 days before a foreclosure sale that the borrower has applied for assistance from the Homeowner Assistance Fund program.
But if the borrower reapplies for homeowner assistance, the servicer doesn't have to delay the foreclosure process if the servicer previously complied with all requirements and the borrower has been delinquent at all times since the prior submission.
Effective date: February 7, 2022